What's your attitue to risk with S&S's?

fimonkey

I'd be really grateful if you could answer my questions below:

1. What's you attitude to risk in the markets and how did you arrive there?

2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

3. If you own a property, what's your equity and do you have a mortgage?

4. Finally, how old are you and how long have you been investing?

My curiosity stems from my own learning so far. I started 'investing' last year purely as a lesson. So far I have only used money I could afford to loose. My miniscule portfolio consists of FTSE all shares trackers (L&G and HSBC) and the dreadful L&G emerging markets tracker. I also own shares in Centrica and Aviva.

To answer my own questions:
1. I think I'm being overly cautious given my age (34), but my inexperience and low starting point are a disadvantage.

2. Cash 95.79% S&S 4.21% That's my whole wealth

3. I don't own property, the cash (value about 20K) is a potential deposit on a house though I think house prices will drop further still so am happy renting in the meantime.

4. 34 and 1 year.

I have wondered whether I should transfer £1200 out of cash into shares, I am interested in those with a dividend and low p/e, at the moment I'm thinking Tesco, Vodafone, Astrazeneca, putting £300 each on those and topping up my existing Aviva and Centrica with £150 each to bring their initial investment upto £300 also.

This is where I think my attitude to risk is however. I would use ii's sharebuilder (£1.50 per trade), the next investment date is the 17th August so I would obviously watch these shares over the next few days - however I feel uneasy taking money out of my cash ISA. Given my age and long term view surely I should happy to take more risk?

btw I am religiously putting £100 into my HSBC tracker every month to teach myself about pound cost averaging too.

bendix

I'm like Dave. I built up a sizeable wedge of cash reserves (currently earning between 4.5 and 7.3% in long-term deposits). This is very much my 'i will never lose or risk' fund. If I needed to retire tomorrow, I could use these resources to generate an income for life.

Then I started putting all my spare money into riskier assets - managed funds, pension fund (fully invested in shares), and saved like hell. Diversified, but predominantly share-based - emerging markets, UK, IT, resources, India, Latin America etc. Over the last three years, this has grown very quickly.

I only started this riskier approach once I'd built my cash nest egg. The rest is investable money.

Current balance is around 50% in cash and term deposits, 25% in shares / pensions etc and 25% in property.

Works for me. I'm 46.

Two properties overseas. Total equity is around GBP250k. No mortgage.

No debt at all - credit card paid in full every month.

smallfry27

I'm not recommending my strategy, maybe you can learn something from my mistakes.

Until my late 40s I concentrated on paying off my mortgage, and building up sufficient cash to retire early. When the mortgage was clear I started buying unit trusts (OEICs), but this was because an FA persuaded me it was the 'only' way to make my money keep up with inflation. I was also told to think of a minimum 10 years time scale for these investments, which sounded fine at the time.

Unfortunately my 10 years in equities has been the worst 10 years in stockmarket history. Every time they dip, I tell myself to hang on til they come up again. This has meant I have spent more of my cash reserves than I hoped, because I didn't want to cash in the equities and realise my losses. Now I have far too much in equities - I'd like to get back to state of 100-age% (i.e. 40% at age 60).

I don't regret paying off the mortgage, or giving up work at 51. I do regret that I didn't keep control on the % I had in equities - I should have moved my early gains to something safer, rather than being greedy and hoped they went higher. I also regret not educating myself about equities more, and trusting FAs to put my interests before theirs. Most of all I wish I'd put more into National Savings Index-linked Certificates - I'm not saying they are best choice if you are younger, but it's a safe way to keep up with inflation.

jhxmt

1. What's you attitude to risk in the markets and how did you arrive there?

I fully expect to invest for the long term (20+ years) and I'm expecting to experience a couple of significant drops in value (40% ish) at points throughout that period. I'm okay with the value varying quite regularly by 10-20%. I arrived at this appetite by (a) being aware that I am in it for the long term and that things should hopefully average out over that period, especially if I'm careful to shift my weightings towards the end of it and (b) being aware that the market does move to that degree at times - it shouldn't come as a shock to me when it does!

2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

I'm "asset-light", as the phrase goes. Most of my wealth, such as it is, is in cash and deposits (or NS&I ILCSs, which for simplicity's sake I'm going to call cash) - about £11k, which is intended to go towards a property deposit at some stage in the next five years. The remainder (about £2k) is in a S&S ISA in a few tracker funds - some of the same ones you mentioned, actually! (FTSE All-Share, FTSE All-World and L&G Emerging Markets). So I'm at about an 85/15 split cash/equities at the moment.


3. If you own a property, what's your equity and do you have a mortgage?
n/a. I own 100% of zero property.

4. Finally, how old are you and how long have you been investing?

I'm 28, and started up the S&S ISA about four or five months ago, with an initial lump sum and now monthly contributions. I've been a saver (i.e. the cash side of things) for much longer - about a decade.

IronWolf

1. What's you attitude to risk in the markets and how did you arrive there?

I am conservative and low risk, this is based on my belief that to maximise long term investment returns limiting the downside is more important than exposing yourself to possible upside. It also hinges on the belief that risk and return are not linked.


2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

S&S: 50%
Cash: 50% (in the highest yielding bank accounts and NS&I)

I have a lot in cash due to the fact I am looking to at some point in the next few years put a deposit down on a property.


3. If you own a property, what's your equity and do you have a mortgage?

n/a

4. Finally, how old are you and how long have you been investing?

25, for a few years now. I started off day trading but that got me nowhere. Then by chance I read a book called the Intelligent Investor, which changed my whole philosophy on investing. I then read Security Analysis by the same author and now research and buy shares for the long term.




My whole investment strategy is to look for shares that represent low risk and high return. This is by no means simple and opportunities are few and far between. I think I've got lucky that I started investing just after a big drop in share prices and there were some opportunities.

I've gone through the whole FTSE 100 and found 2 companies that I considered low risk and decent return. Now Im going through the FTSE 250, seems to be more opportunity for high return here so I'm optimistic, but as you can see, from looking at maybe 150 companies I have only invested in 3. Its a lot of effort, and it means my portfolio isn't what many would call diversified. My two top holdings are 20% of the portfolio, each!

Some consider this high risk, but risk is subjective. I consider it higher risk to put 5% in a brilliant company and 15% in ok companies, than to put 20% in a brilliant company. At the end of the day its my analysis that will either make or break me and I'm confident enough in my own intelligence to put my money behind it

Jegersmart

1. I am not risk averse having traded shares and CFD's on and off for many years as well as using funds etc. . I have owrkedin the financial and energy markets for over 13 years so far. Contrary to what "jhxmt" says above I am going to try to avoid the huge drops that come by every so often through active management of my holdings. Sure, I am in for the long term but I am not going to let 2-7 years of gains be wiped out because I didn't press the "sell" (or reallocation) button on my funds portal!

2. Cash 10%, Equities 60%, Derivatives 5%, Bonds 25%. I am maxed out on my current employer pension contribution, I manage my own SIPP and usually maximise my ISA allocation every year - and I never use a Cash ISA or Tracker funds in either ISA, non-ISA or Pension forms/wrappers. I also usually put away a decent mortgage sized payment away each month as I am currently renting and do not have the enforced savings plan called a mortgage.

3. I haven't owned property since 2001 (yes, sold out a little early) and do not have exposure to property at the current time.

4. I am 40 and have been investing for almost 20 years, trading my own book on and off for about 10-12 years.


I have been contributing to pensions since I was 20 years old, I have fairly low overheads (apart from being a petrol head) and am thus not tied down to London or any specific location. I do not have children and my partner and I earn a substantial London salary each which gives us some flexibility (while it lasts). I can move anywhere and do anything with the minimum of fuss - for me being mobile and agile in that respect is important at the moment. I will almost certainly get back into property later on, but it will not be for investment probably but rather a cash purchase. I guess "freedom" is a recurring theme in my subconscious decision-making - whilst I really enjoy what I do I realise that I may not want the same levels of stress in the future....

HTH

J

sorcerer

jhxmt wrote: »

1. What's you attitude to risk in the markets and how did you arrive there?

I would say I have a medium to high risk attitude.

2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

Cash 94%
ISA/SIPP 6%


3. If you own a property, what's your equity and do you have a mortgage?
Nope

4. Finally, how old are you and how long have you been investing?

Im 37 and been investing for two years.

ian_w_4

1. What's you attitude to risk in the markets and how did you arrive there?

Medium I suppose. My S&S (funds) are spread around UK smaller Companies, Emerging Markets, Global Equities UK Assets/gilts and Corporate bonds. These are long term savings and my version of a pension, being self employed. Most is kept in cash, should I need access to it as my business can be volatile (made £300 last month, £9k this month!)

2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

Cash (Cash ISAs and Easy access savings) 30%
S&S (Funds) 10 %
Equity in house 60%


3. If you own a property, what's your equity and do you have a mortgage?
50/50 equity and mortgage

4. Finally, how old are you and how long have you been investing?

32. Cash ISA/savings for a few years, only started dabbling in funds in April this year with an initial lump sum and monthly contributions

Thrugelmir

fimonkey wrote: »

1. What's you attitude to risk in the markets and how did you arrive there?

2. As a percent, how much do you currently have in cash and S&S. Where is the rest of your wealth?

3. If you own a property, what's your equity and do you have a mortgage?

4. Finally, how old are you and how long have you been investing?

1. Invest for the long term in solid cash generative businesses. Reinvest the dividend income into other shares. Build a diversified portfolio.

If you don't understand how the Company makes its money don't invest.

If see a product and can see potential in it. Then take a punt on the shares. Though never invest what you can't afford to lose.


2. Cash holding historically just a reserve of 6-9 months expenditure. Also hold short term cash balances if stock markets are wildly fluctuating as they are now. Though will take the opportunity to jump in.

Having a lifetime base rate tracker at .35% above base. Has meant that locking into 5 year cash ISA rates is far more attractive. Average rate currently 4.4% on recent ISA's. Long may low interest rates continue!

3. 75% equity in property.

4. My first job was at Friends Provident Life Office many moons ago. I used to keep the ledgers (manual no computers in those days) for the Life Fund recording the purchases and sales of gilts, shares and bonds. Settling with brokers chasing, ensuring receipt of dividend income etc. So I got the bug. Started buying investment trusts on the recommendation of one of the traders rather than individual shares.